Blog

As bold as ICE

If you thought Intercontinental Exchange’s quest for global
domination was going to stop at the monumental acquisition of NYSE Euronext,
you would have been wrong.

Jeffrey Sprecher’s juggernaut continues to roll on throughout
the global markets arming itself with new weapons along the way.

Now fully equipped with an array of exchanges and clearing
houses on both sides of the Atlantic, ICE has said its Singapore-based
operations will be up and running in the coming months.

The planned exchange and clearing house in Singapore will
give ICE a much-sought-after foothold in Asia, a region western exchanges have
been scrambling to become involved in for some time.

Almost as if ticking off his wish list for world domination
from Atlanta, Sprecher is driving ICE forward by getting his hands on two
crucial cogs in his machine, an interest rates platform in Europe and a
presence in Asia.

ICE’s buy-over-build approach in acquiring existing
infrastructures is shaving valuable time off the process of building exchanges
and clearing houses from the ground up.

The forthcoming launch of ICE Futures Singapore follows
February’s purchase of the Singapore Mercantile Exchange (SMX) and puts ICE
well ahead of European rivals Eurex in carrying out similar plans for an Asian
clearing house.

And having beaten off competition to administer Libor and
ISDAFIX, the group is planning a major overhaul of the benchmarks, including licensing
fees for the use of Libor.

Noting raised eyebrows in the market, Sprecher said the
“modest” fees were the price of making the rate better.

Monetising the rates will add another revenue stream for
ICE, which posted strong results for the second quarter of this year, even with
trading volumes declining.

Despite the tough interest rates environment in Europe, ICE
profits hit US$226 million during the period, up 46% from the previous year.

The exchange also continues to branch out with compliance
and workflow tools such as ICE Trade Vault and ICE Link, and just last week acquired intellectual property
rights relating to computerised trading strategies.

The patents
cover automated strategies, which calculate and make trading decisions, and the
exchange is set to inform investors of licensing plans in the coming months.

It has been
a busy couple of years for ICE, but don’t expect it to sit still for long.

Given the
exchange group’s track record there could be more acquisitions and new initiatives
on their way as ICE continues its aggressive growth plan.

At the start of the millennium ICE was just getting up and
running, now 14 years after being founded, the company is playing an integral
role in shaping the global financial markets.